Harris & Partners Inc. has been in business 30 years serving corporate and business clients. Cash flow problems and accumulated debts are common occurrences among corporations and other businesses alike. Fortunately, there are several options available as recently the credit industry has become more flexible than ever. More creditors are allowing companies to make arrangements or proposals instead of going into bankruptcy. A struggling corporation may have the choice of informal payment arrangement, formal payment arrangement or proposal, protection through the Companies’ Creditors Arrangement Act (CCAA), receivership and/or bankruptcy. Often, corporations and businesses that are insolvent will end up restructuring their debt, which can include filing a corporate proposal instead of filing for bankruptcy.
Informal and Formal Arrangements
You or your Licensed Insolvency Trustee (LIT) can seek to work out a payment plan with your creditors or a refinancing that gives your company more time to pay its debts.
You can authorize your Licensed Insolvency Trustee (formerly trustee in bankruptcy) to make a proposal to your company’s creditors to pay a substantial portion of your unsecured debt over an extended time period.
Available to business’s with $5 million in debt, you can receive short-term protection from your creditors to restructure your business and financial affairs. An initial application is made to the court to obtain protection.
A receiver is appointed by the secured creditor and represents the secured creditor’s interests. A Receiver can be authorized to operate your business if it is necessary or advisable. For example, a receiver can be appointed to complete work in progress, carry out an important contract, or maximize the value of by business by the selling it. A receivership is usually initiated by court appointment but can be initiated privately. The receiver derives his or her rights through a court order or contractual agreement.
Bankruptcy proceedings are an option of last resort that can be initiated by a debtor or creditor. Bankruptcy also occurs automatically if a Division I Proposal under the Bankruptcy Insolvency Act fails.
Corporate and business financial challenges can be quite involved and diverse and so the options available for resolution can be equally diverse. Speaking with a licensed insolvency trustee can help you make the appropriate decision that is best for your organization.
At Harris & Partners Inc., our Licensed Insolvency Trustees have extensive experience with corporate insolvency. Over our three decades in business we have seen a wide range of companies – everything from small independent companies to franchises to companies with hundreds of employees, with up to $15 million dollars in debt. We handle all corporate cases and there is no business bankruptcy case we would turn away. Insolvency recovery is one of our key areas of specialty.